Accuracy Rates Have Increased at Taxpayer Assistance
Centers, but Improvement Is Needed to Provide Taxpayers Top-Quality Customer
Service

February 2004

Reference
Number:2004-40-065

This report has cleared the Treasury
Inspector General for Tax Administration disclosure review process and
information determined to be restricted from public release has been redacted
from this document.

This
report presents the results of our review of the Internal Revenue Service’s
(IRS) responses to taxpayers’ tax law questions.The overall objective of this review was to determine if the IRS
provided accurate and timely responses to taxpayers’ tax law questions from January through June 2003.In
addition, we assessed whether IRS employees were professional and courteous to
our auditors that made anonymous visits to the Taxpayer Assistance Centers
(TAC).We
also evaluated whether TAC addresses and office hours made available to
taxpayers were accurate, whether IRS employees adhered to operating guidelines
on referral procedures, and whether all taxpayers were provided an opportunity
to participate in the customer satisfaction survey at the TACs.Lastly, we evaluated the TAC Quality
Assurance Program.

We
have issued nine bi-monthly and two semiannual reports on the results of our
visits to the TACs from January 2002 through June 2003.This
report covers the period January through June 2003 but also includes a summary
of the results of all auditor visits to the TACs from January 2002 through June
2003.

We commend the IRS for the
corrective actions it has taken in response to our previously issued
reports.We believe the increase in
accuracy rates compared to those in the same period in Calendar Year 2002 canbe directly attributed to these actions.For example,
IRS employees correctly answered 71 percent of the questions asked and
incorrectly referred only 2 percent to publications from January through June
2003, compared to correctly answering only 53 percent of the questions asked
and incorrectly referring 20 percent to publications from January through June 2002.Overall, from January 2002 through June
2003, our auditors made 605 anonymous visits to 303 TACs located in 50 states
and Washington, D.C.The auditors
received correct answers to 729 (60 percent) of the 1,213 questions asked.

From January through June
2003, our auditors made 206 visits to 104 TACs located in 32 states and asked
411 tax law questions that are within the scope of topics TAC employees should
have been trained to answer.The
auditors received correct answers to 293 (71 percent) of the 411 questions
asked.For 10 (2 percent) of the 411
questions asked, IRS employees referred the auditors to IRS publications and
generally advised the auditors to conduct their own research to find the
answers to their questions.

Specific trends that, when
addressed, may increase taxpayers’ chances of receiving correct answers to
their questions and consistent levels of customer service include:

Taxpayers
have a higher chance of receiving accurate answers when IRS employees
follow required procedures to use tax instructions, forms, and
publications to answer questions.In 76 percent of responses for which auditors documented that the
employee used these materials, the questions were answered correctly.

Taxpayers
have a higher chance of receiving accurate answers when IRS employees ask
probing questions to obtain relevant facts from the taxpayers.Accuracy rates were 92 percent when all
probing questions were asked and only 31 percent when no probing questions
were asked.

Taxpayers
that visit the TACs in certain geographical locations may receive
inconsistent levels of customer service.For example, 82 percent of the
questions asked in Area 4 were correctly answered, while only 60 percent
of the questions asked in Area 6 were correctly answered.

IRS employees also answered
tax law questions they were not trained to answer.Auditors completed visits to 85 additional TACs to determine if
IRS employees referred taxpayers to the IRS toll-free telephone lines or
Internet for questions out of the scope of their training.IRS employees did not follow referral
procedures for 127 (57 percent) of the 223 out of scope questions asked.

In October 2002, the IRS
implemented a Quality Assurance Program to provide employees feedback on ways
to improve the quality of service offered in the TACs.Members of the Quality Assurance staff
visited 252 TACs and asked 1,239 tax law questions,but
the Quality Assurance Program does not have a process to provide accurate
trending information.

Auditors had
positive experiences when they visited the TACs.IRS employees were professional and courteous in 203 (99 percent)
of the 206 visits.Wait time for
service was 1 hour or less for 96 percent of the visits.In
addition, 74 (71 percent) of the 104 TACs visited by our auditors had office
hours listed on the IRS Internet site, The Digital Daily, which matched
the hours posted at the TACs.However,
the auditors were not offered a Customer Survey Comment Card for 92 (45 percent)
of 206 visits.The IRS uses Customer
Survey Comment Cards to obtain taxpayer feedback regarding the quality of
customer service they receive at the TACs.

We recommended that the
Commissioner, Wage and Investment Division, revise the Quality Assurance
Program to include a systematic methodology to select scenarios and ensure the
accuracy and sufficiency of information captured in the Quality Assurance
database.

Management’s Response:IRS
management agreed with our recommendation and reported outcome and has already
initiated corrective actions.Management appreciated our recognition of the corrective actions taken
on issues identified in our previous reports, but they continued to disagree
with our method of reporting referrals to publications and service denied when
computing the accuracy rate.As such,
they do not believe our reported accuracy rate of 71 percent is a true measure
of the quality of responses provided by the IRS.

Excluding the references to
publications, service denied, and referrals to other employees brings the
accuracy rate to 74 percent, which management recognized is inadequate.Management’s long-term approach to improving
quality is the implementation of initiatives that improve the quality,
efficiency, and delivery of service to taxpayers.Their plans bring together four initiatives into one project
known as the Embedded Quality Business Integration (EQBI).EQBI focuses on standardized measures,
employee monitoring, and enhanced feedback tools.Management’s complete response to the draft report is included as
Appendix XII.

Copies of this report are
also being sent to the IRS managers who are affected by the report recommendation.Please contact me at (202) 622-6510 if you
have questions or Michael R. Phillips, Assistant Inspector General for Audit
(Wage and Investment Income Programs), at (202) 927-0597.

One of the Congress’ principal objectives in enacting the
Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98)
was to mandate that the IRS do a better job of meeting the needs of its
customers.In the RRA 98, the Congress
directed the IRS to achieve a better balance between its post-filing
enforcement efforts and pre-filing taxpayer assistance through education and
service.To comply with this
Congressional mandate, the IRS revised its mission statement to refocus its
emphasis on helping taxpayers understand and meet their tax responsibilities.

Despite this increased emphasis on customer service, the
Senate Committee on Appropriations was deeply concerned about the findings in a
May 2001 Treasury Inspector General for Tax Administration (TIGTA) audit report
on the IRS Taxpayer Assistance Centers (TAC).That report showed our auditors did not receive accurate or sufficient
answers to 73 percent of their tax law questions posed during anonymous visits
to the TACs during January and February 2001.

Based upon the results of our 2001 review, Senator Byron
Dorgan (Democrat - North Dakota), then Chairman of the Subcommittee on Treasury
and General Government, proposed an amendment to the Treasury spending bill for
Fiscal Year (FY) 2002.The amendment
required the TIGTA to conduct visits to all of the TACs and report to the
Congress on whether taxpayers are provided correct and prompt answers to their
tax law questions.Consequently, we are
conducting anonymous visits to all of the TACs over a 2-year period.

TACs

One of the IRS’ FY 2003 major management challenges, as
defined by the TIGTA, is to provide quality customer service to each and every
taxpayer.Taxpayers have several
options from which to choose when they need assistance from the IRS.These options include walk-in service at the
TACs, toll-free telephone assistance, and the IRS Internet site called TheDigital Daily.

The IRS is committed to providing top-quality service to
taxpayers, as shown by the IRS Field Assistance (FA) office’s mission to
minimize the burden to customers in satisfying their tax obligations by
providing the right services at the right location at the right time.The FA office has overall responsibility for
the TACs, and its services are provided in 403 TACs organized into 7
geographical areas located throughout the United States.

To accomplish its mission, the FA office provides
professional assistance, education, and compliance services to customers that
desire face-to-face interaction.IRS
employees that work in the TACs assist customers by interpreting tax laws and
regulations, preparing some tax returns, resolving inquiries on taxpayer
accounts, and providing various other services designed to minimize the burden
on taxpayers in satisfying their tax obligations.Operating guidelines require IRS employees to identify themselves,
provide their identification number either verbally or visually to all
taxpayers, and assist taxpayers in a professional and courteous manner.

According to the IRS, the TACs served approximately 5.7 million
taxpayers from January through June 2003.Approximately 1.2 million of these taxpayers visited the TACs for
assistance with tax law.Figure 1 shows
the percentage of time spent by employees in the TACs on the various services
detailed above.

Figure 1:Percentage of Time Spent
by IRS Employees in the TACs Assisting Taxpayers

Figure 1 was removed due to its size.To see the Figure 1, please go to the Adobe
PDF version of the report on the TIGTA Public Web Page.

Auditor reviews of the TACs

We have issued nine bi-monthly and two semiannual reports on
the results of our visits to the TACs from January 2002 through June 2003.This report covers the period January through
June 2003 but also includes a summary of the results of all auditor visits to
the TACs from January 2002 through June 2003.(See Appendix X for year‑to-date accuracy rates by month.)During this period, TIGTA auditors made 605 anonymous
visits to 303 TACs located in 50 states and Washington, D.C.Our auditors received correct answers to 729
(60 percent) of the 1,213 questions asked.(See Appendix XI for the overall accuracy rate from January 2002 through
June 2003.)

From January through June 2003, auditors made 206 anonymous
visits to 104 TACs located in 32 states.(See Appendix V for specific states visited.)During these visits, the auditors asked 411 questions related to
21 tax law topics that are within the scope of topics that TAC employees should
have been trained to answer.Our
questions were designed to cover a wide range of tax law topics to provide an
overall assessment of whether taxpayers are receiving correct answers to
questions that an individual taxpayer might ask when he or she visits a TAC.

This is the third semiannual trend report on the results of
our visits to the TACs.The review was
conducted in the IRS Customer Assistance, Relationships, and Education function
in the Wage and Investment (W&I) Division and combines the results of our
visits to the TACs from January through June 2003.This review was conducted in accordance with Government
Auditing Standards.Detailed information on our audit
objectives, scope, and methodology is presented in Appendix I.Major contributors to the report are listed
in Appendix II.

IRS employees correctly answered 71 percent of the questions
asked and incorrectly referred only 2 percent to publications from January
through June 2003, compared to correctly answering 53 percent of the questions
asked and referring 20 percent to publications from January through June
2002.From January through June 2003,
our auditors visited 104 TACs and asked 411 tax law questions.

Figure 2 shows the breakdown of the accuracy rates for this
period.

Figure 2:Responses to Tax Law Questions (411)

Correct

Correct but
Incomplete

Incorrect

Ref. to Pub.

Service Denied

Correct
Toll-Free Referral

Responses

274

19

103

10

1

4

Percentages

67%

5%

25%

2%

0%

1%

Source:
Anonymous visits performed by TIGTA auditors.

Figure 3 shows the comparison in accuracy rates for both
periods in 2002 and 2003.

Figure 3:Comparison of January
Through June 2002 and January Through June 2003 Semiannual Accuracy Rates

Figure 3 was removed due to
its size.To see Figure 3, please go to
the Adobe PDF version of the report on the TIGTA Public Web Page.

We commend the IRS for the corrective actions it has taken
in response to our previously issued reports.We believe the increase in accuracy
rates can be attributed to the corrective actions taken by the IRS in response
to our previously issued bi-monthly and semiannual reports.For example, the Referred to Publication
responses significantly decreased after the IRS implemented a zero-tolerance
policy.As a result of the reduction in
Referred to Publication responses, IRS employees provided responses to more
questions that were correctly answered.

Despite improvements, additional managerial oversight is
needed to ensure the TACs are providing top-quality customer service to
taxpayers.For example, TIGTA auditors
experienced minimal improvement in the number of incorrect responses received
in comparison with those received in 2002.Auditors received incorrect answers to 126 (27 percent) of 470 questions
asked fromJanuary through June 2002 and to 103
(25 percent) of 411 questions asked during this same period in 2003.

An analysis of the responses received from January through
June 2003 to our tax law questions identified the following trends.If the IRS addresses these trends with its
employees, it may increase taxpayers’ chances of receiving correct answers to
their questions and ensure taxpayers receive consistent levels of customer
service.(See Appendix VIII for results
by tax law topic.)

Taxpayers have a higher chance of receiving accurate answers
when IRS employees follow required procedures to use tax instructions, forms,
and publications to answer questions

Accuracy rates decrease when IRS employees do not use
available tax instructions or publications to assist them in answering
taxpayers’ questions.IRS employees
used available tax instructions or publications when answering 357 (87 percent)
of the 411 questions asked.Analysis of
the responses to these questions showed the accuracy rate was 76 percent.In contrast, the accuracy rate was only 43
percent when tax instructions or publications were not used.

Figure 4 shows the accuracy rates for tax law questions when
IRS employees did and did not use tax instructions or a publication(s) when
providing assistance to our auditors.

Figure 4:Responses to Questions for Which Employee Use of Instructions, Forms,
and Publications Was Documented (411)

Questions Answered

Correct

Incorrect

Ref. to Pub.

Service Denied

Correct
Toll-Free Referral

Form/Pub. Used

357

76%

22%

1%

0%

1%

Form/Pub. Not
Used

54

43%

43%

9%

2%

4%

Source:Anonymous visits
performed by TIGTA auditors.

During the fall of 2002, IRS employees were trained in and
required to use the Publication Method when assisting taxpayers.This Method requires IRS employees to obtain
the appropriate publication, discuss specific information related to the topic,
ask appropriate questions to obtain facts when assisting a taxpayer, and then
respond to the taxpayer’s issue or question.

In compliance with the Publication Method, IRS employees are
to make sure taxpayers receive an answer.However, during seven of our visits, IRS employees referred the auditors
to IRS publications and generally advised the auditors to conduct their own
research to find the answers to their questions.Auditors also documented that some employees are still choosing
to assist taxpayers without using available resources or asking all required
questions.

Taxpayers have a higher chance of receiving accurate answers
when IRS employees ask probing questions to obtain relevant facts from the
taxpayers

IRS employees did not always ask all the probing questions
outlined in tax instructions or publications.The risk that taxpayers will receive incorrect answers is increased when
IRS employees do not ask all questions to obtain relevant facts.

·Fifty-four (92 percent) of 59 questions for which IRS
employees asked all probing questions outlined in the tax instructions and
publications were correctly answered.

·Nine (31 percent) of 29 questions for which IRS
employees did not ask any probing questions were correctly answered.

For each scenario, TIGTA auditors identified and remembered
facts relating to all the potential probes that could be asked by an IRS
employee.While all the probes may not
have been necessary to provide a correct answer, certain probes provide key
information needed to ensure all relevant facts were obtained from the
taxpayer.

For example:

·For 29 (60 percent) of 48 Earned Income Tax Credit
(EITC) questions, IRS employees did not ask the auditors if they had valid
Social Security Numbers (SSN).To claim
the EITC, the qualifying child of a taxpayer must have a valid SSN.

·For 11 (61
percent) of 18 Scholarship questions, IRS employees did not ask the auditors
the amounts of the scholarships they received.Scholarship money received is taxable only if the amount of the
scholarship exceeds the cost of tuition, fees, and books.

By not using available resources to ask all required
questions, IRS employees are making assumptions and providing answers without
considering facts relevant to ensuring the answers given are correct.

Taxpayers that visit the TACs
in certain geographical locations may receive inconsistent levels of customer
service

The TAC location affects overall accuracy rates.Results from the TACs visited in 7 areas in
32 states from January through June 2003 show the following:

·Seventy-five (82 percent) of 92 questions asked in Area
4 were correctly answered.

·Thirty-one (60 percent) of 52 questions asked in Area 6
were correctly answered.

·Seven (6 percent) of 127 questions asked in Areas 5 and
6 resulted in auditors being referred to a publication, compared to none in
Areas 2 and 7.

(See Appendices VI and VII for accuracy rates by state and
geographical area.)

The burden on taxpayers is increased when they rely upon the
IRS to help them comply with the tax law, but they are not provided correct
responses to tax law questions.If the
accuracy results for the 411 questions asked between January and June 2003 are
indicative of the actual responses taxpayers receive when they visit a TAC, we
estimate 103 taxpayers could have received incorrect responses to tax law
questions.Also, approximately 1.2
million taxpayers that visited the TACs from January through June 2003 to ask
tax law questions were at risk of receiving incorrect responses to their tax
law questions.We are not making any
recommendations at this time but will monitor this during the annual filing
season audits of the TACs.

When providing answers to 127 (57 percent) of 223 “out of
scope” questions, IRS employees did not follow referral procedures.Out of scope questions are those that are
beyond the level of training received by employees working in the TACs.IRS guidelines require that employees that
receive an out of scope question offer to call the appropriate IRS toll-free
telephone line on behalf of the taxpayer or to submit the question in writing
to a subject-matter expert(s) via theInternet
(R-mail).Figure 5 provides a breakdown
of employees’ answers to tax law questions beyond their level of training.

Figure 5:Responses
to Out of Scope Tax Law Questions (223)

Correctly Referred

Questions Answered

Correct

Incorrect

Ref. to

Pub.

Responses

96

56

32

39

Percentages

43%

25%

14%

17%

Source:Anonymous visits performed by TIGTA auditors.

The IRS does not want the employees in the TACs to answer
tax law questions beyond their skill level or for which they have not been
trained.This reduces employee assumptions
or interpretation of tax law for complicated questions and reduces the risk
that taxpayers will receive incorrect answers to their questions.Employees are not expected to be experts in
all aspects of tax law.The burden on
taxpayers is increased when they rely upon the IRS to help them comply with the
tax law, but they are provided with incorrect answers.We are not making any recommendations at
this time but will monitor this during the annual filing season audits of the
TACs.

Beginning in October 2002, the FA office instituted a
Quality Assurance Program for the TACs that will help identify ways to improve
the accuracy and quality of its work processes.However, improvements could be made to the program to make it
more effective.

As part of the Quality Assurance Program, the Quality
Assurance staff plays the role of taxpayers and makes anonymous visits to the
TACs, completing the steps a taxpayer might take if he or she decided to visit
a TAC to obtain answers to a tax law question(s).Results of these reviews are provided to each employee’s manager
with specific feedback on the quality of service provided in the TACs.

During FY 2003, the Quality Assurance staff visited 252 TACs
and asked 1,239 tax law questions that were within the scope of questions IRS
employees are trained toanswer.Based upon the IRS’ request that we review
the Quality Assurance Program, the following limitations were identified that,
if addressed, would strengthen the program.

The Quality Assurance staff
developed scenarios that were too simplistic and did not adequately assess the
employees’ knowledge of tax law and IRS procedures

From October 2002 through June 2003, the Quality
Assurance staff asked 1,157 tax law questions (93 percent of the total for FY
2003) that the employees could easily answer (i.e., the questions did not
require the employees to ask additional probing questions and for the most part
could be answered with a yes or no response).In April 2003, we advised the Quality Assurance staff that they should
revise the scenarios.They agreed, and
in July 2003 the Quality Assurance staff began using scenarios that require IRS
employees to ask probing questions to correctly answer the questions.This should allow the Quality Assurance
staff to better assess the employees’ knowledge of tax law and IRS procedures.

The Quality Assurance staff
randomly chose scenarios and tax law topics that could inhibit trend analyses

For all 1,239 questions, the Quality Assurance staff
selected questions from 24 topics designed to cover a wide range of tax law
topics.In addition, each staff member
selected the question(s) each preferred when making anonymous visits to the
TACs.They did not weigh the number of
questions asked per tax law topic or the specific number of times each scenario
was used.Therefore, the Quality
Assurance staff could not easily or adequately use the results to identify
trends or opportunities for improvement.

The Quality Assurance Program
does not have a process to provide accurate trends on the overall quality of
assistance provided in the TACs

For 112 questions asked at the TACs by the Quality
Assurance staff, the results were not correctly input into the Program’s
database.Results from the Quality
Assurance staff visits to the TACs are documented in a Data Capturing
Instrument sheet and manually input into a database that is used to calculate
tax law accuracy rates and identify trends.The Quality Assurance staff uses the data to provide feedback to TAC managers.We selected a judgmental sample of 50 of 112
questions and compared information documented in the Data Capturing Instrument
to information captured in the database.For 6 (15 percent) of 40 sheets, information in the Data Capturing
Instrument did not match that in the database.We were unable to locate the remaining 10 Data Capturing Instruments in
IRS records.

Beginning
in Calendar Year 2004, we plan to limit our reviews of the TACs to the filing
season.The Quality Assurance Program
will be the main source of continuous feedback to TAC employees and
managers.Without a process to balance
the use of scenarios and ensure accurate and sufficient information is captured
in their database, the Quality Assurance staff will be unable to effectively
assess the quality of service provided to taxpayers and provide useful feedback
including trends to TAC managers and employees for improving the quality of
service.

1.Revise
the Quality Assurance Program to include a systematic methodology to select
scenarios and ensure the accuracy and sufficiency of information captured in
the Quality Assurance database.

Management’s Response:In October 2003, the IRS changed its
methodology for selecting scenarios for Quality Assurance staff reviews.Scenarios are now selected based upon the
frequency of questions asked on a specific topic from Customer Account Services
function toll-free telephone line data.

Beginning with the
February 2004 shopping reviews, a designated reviewer will check all inputs
into the database for accuracy.This
will be performed monthly.In addition,
the Quality Assurance manager will conduct sample reviews of each reviewer’s
Data Collection Instrument for accuracy.

Addresses were posted on the IRS Internet site, The
Digital Daily, for the 104 TACs visited and matched the addresses posted at
the TACs for 87 (88 percent) of 99 TACs.In addition, office hours were posted on The Digital Daily for
all 104 TACs visited and matched the office hours posted at the TACs for 74 (71
percent) of the 104 TACs.

Taxpayers can access The Digital Daily and follow the
appropriate links to obtain the addresses and office hours of the TACs located
in their state.Taxpayers that do not
have access to the Internet may call the IRS toll-free telephone numbers or
automated telephone messaging system at the TACs to obtain this information.

In our first semiannual report, we made no recommendations
pertaining to TAC addresses and office hours because of the IRS’ response to
one of our bi-monthly reports.However,
while progress was made, from July through December 2002, 2 percent of TAC
addresses and 43 percent of TAC office hours posted at the TACs did not match
those on The Digital Daily.As a
result, our second semiannual trend report included a recommendation to ensure
TAC addresses and office hours made available to taxpayers are accurate.

In preparing for the 2003 Filing Season, IRS managers were
required to certify that all TAC office hours and addresses were correct on The
Digital Daily and on the automated telephone messaging system at the
TACs.The IRS informed us that the data
available to taxpayers from its Internet site were the most reliable.Figures 6 and 7 show the comparison of TAC
addresses and office hours posted on The Digital Daily to addresses and
office hours provided to taxpayers via the IRS toll-free telephone numbers and
automated telephone messaging system.

Figure 7:Comparison of Accuracy of Information Provided via Internet to
the Automated Telephone Messaging System

Occurrences

Percent

Address
Correct

66

73%

Office
Hours Correct

62

69%

Source:Anonymous visits performed by TIGTA auditors.

When TAC office hours and addresses made available to
taxpayers are not accurate and timely updated, taxpayers may find it difficult
to seek and obtain face-to-face contact with the IRS.We are not making any recommendations at this time but will
monitor this during the annual filing season audits of the TACs.

For 95 (91 percent) of 104 TACs visited from January through
June 2003, auditors observed that Customer Survey Comment Cards were available
for taxpayers.However, for 92 (45 percent)
of the 206 visits, auditors were not offered a Comment Card.The IRS developed Customer Survey Comment
Cards to obtain feedback on the quality of service received at the TACs.Each TAC should have Comment Cards available
for all taxpayers that visit the TACs for assistance, and IRS employees are
required to offer a Customer Survey Comment Card to every taxpayer who is
provided with face-to-face service.

Taxpayers have the option to complete the Comment Card and
place it in a secure drop box located in the TAC or to mailit directly to an independent contractor the IRS
hired to collect and summarize taxpayer feedback.Taxpayers that completed Customer Survey Comment Cards from
January through July 2003 gave the IRS an overall customer satisfaction rate of
87 percent and dissatisfaction rate of 8 percent.

The IRS is to be commended for obtaining high satisfaction
rates; however, the contractor reported that less than 4 percent of the total
number of taxpayers that visited the TACs from January and July 2003 completed
a Customer Survey Comment Card.While
completing the Comment Card is voluntary, IRS employees that do not follow procedures
to offer taxpayers Comment Cards limit opportunities for a broader depiction of
how satisfied taxpayers are with the quality of service at the TACs.We will continue to monitor this area during
the FY 2004 Filing Season reviews of the TACs.

The overall objective of this review was to determine if the
Internal Revenue Service (IRS) provided accurate and timely responses to
taxpayers’ tax law questions from January through June 2003.In addition, we assessed whether IRS
employees were professional and courteous to our auditors that made anonymous
visits to the Taxpayer Assistance Centers (TAC).We also evaluated whether TAC addresses and office hours made
available to taxpayers were accurate, whether IRS employees adhered to
operating guidelines on referral procedures, and whether all taxpayers were
provided an opportunity to participate in the customer satisfaction survey at
the TACs.Finally, we evaluated the
Field Assistance (FA) Quality Assurance Program.

To achieve these objectives, we:

I.Determined if the IRS provided quality service and
accurate responses to tax law inquiries at the 104 TACs visited from January
through June 2003.This included
evaluating the results of our visits to identify trends.We asked 411 tax law questions that an
individual taxpayer might ask.The
questions were based upon the training provided to IRS employees in the TACs
during the fall of 2002 and the scope of services for tax law assistance
prescribed in the Fiscal Year 2002 FA Operating Procedures.

II.Determined if IRS employees followed FA Operating
Procedures to refer questions that were outside the scope of services they
should have been trained to answer.In
addition to scheduled visits, auditors completed visits to 85 additional TACs
and asked 223 questions that were beyond the IRS employees’ level of training.

III.Determined the quality of
service provided by the IRS employees.

IV.Determined if accommodations
in the TACs visited were suitable to provide quality customer service.

V.Determined if Customer Survey Comment Cards were available at
the TACs and offered to taxpayers.

VI.Evaluated the IRS FA office Quality Assurance process to
improve the quality of customer service offered in the TACs.We reviewed 1,239 questions and identified
112 for which the results were not correctly input into the Quality Assurance
Program’s database.We used a
judgmental sample to randomly select 50 of 112 questions and compared
information documented in the Data Capturing Instrument to information captured
in the database.We used a judgmental
sample because we did not want to project the results.

This appendix presents detailed information on the
measurable impact that our recommended corrective action will have on tax
administration.This benefit will be
incorporated into our Semiannual Report to the Congress.

Type and Value of Outcome Measure:

·Taxpayer Burden – Potential; 103 taxpayers (see pages 4
and 10).

Methodology Used to Measure the Reported Benefit:

If the accuracy results for the 411 tax law questions we
asked from January and June 2003 are indicative of the actual responses
taxpayers receive when they visit a Taxpayer Assistance Center, we estimate 103
taxpayers could have received incorrect responses to tax law questions.

Management Advisory Report:Taxpayers Continue to Receive Incorrect
Answers to Some Tax Law Questions (Reference Number
2002-40-086, dated April 2002).

Management Advisory Report:Taxpayers Continue to Receive Incorrect
Answers to Some Tax Law Questions (Reference Number
2002-40-113, dated June 2002).

Management Advisory Report:Progress Was Made to Provide Taxpayers With
Correct Answers to Tax Law Questions (Reference Number
2002-40-161, dated August 2002).

Trends in
Customer Service in the Taxpayer Assistance Centers Show Procedural and
Training Causes for Inaccurate Answers to Tax Law Questions (Reference Number 2003-40-023,
dated November 2002).(Semiannual
Report for January Through June 2002)

Taxpayers That
Visited Taxpayer Assistance Centers in July and August 2002 Received Incorrect
Answers to Some Tax Law Questions (Reference Number 2003-40-024, dated November 2002).

Taxpayers That
Visited Taxpayer Assistance Centers During September and October 2002 Received
More Correct Answers to Tax Law Questions Than in Prior Months (Reference Number 2003-40-040,
dated December 2002).

Taxpayers That
Visited Taxpayer Assistance Centers in November and December 2002 Received
Incorrect Answers to Some Tax Law Questions (Reference Number 2003-40-072, dated
March 2003).

Trends in Customer Service in the Taxpayer
Assistance Centers Continue to Show Procedural Causes for Inaccurate Answers to
Tax Law Questions (Reference Number
2003-40-158, dated August 2003).

Progress Was
Made to Provide Taxpayers With Correct Answers to Tax Law Questions, but
Improvements Are Needed to Ensure Referral Procedures Are Followed (Reference Number 2003-40-120,
dated May 2003).(Semiannual Report for
July Through December 2002)

Taxpayer Assistance Center Employees Improved
the Accuracy of Answers to Tax Law Questions but Answered Some Questions Beyond
Their Level of Training (Reference Number 2003-40-157, dated July
2003).

Taxpayer Assistance Center Employees
Continued to Improve the Accuracy of Answers to Tax Law Questions During May
and June 2003 (Reference Number 2003-40-198, dated September
2003).